Social Capital is as valuable as financial capital. How are you leveraging it?
By Oluwatosin Olaseinde
From a theory perspective, social capital refers to those factors of effectively functioning social groups that include such things as interpersonal relationships, a shared sense of identity, a shared understanding, shared norms, shared values, trust, cooperation, and reciprocity. But from a financial perspective, social capital basically comprises the value of social relationships and networks that complement the economic capital for economic growth of an organization or even persons.
Did you know that social capital is as valuable as financial capital? Because it consists of the economic resources garnered from human interactions. From tangible to non-tangible assets, such as information, innovative ideas, and even financial support.
We’ve been able to establish that social capital is an asset. So what are you doing to build this asset class? How are you deliberate about networking and gradually leveraging on it positively? With advancement in technology i.e internet and social media, social capital has progressed from small circles, family dynasties or word of mouth. It has allowed for circles to be accessed, for networking to be scaled for virtual growths to be attained.
Social capital is a critical tool that can be used for businesses. For example, many companies have progressed actively leveraging on this asset. They are moving away from sole dependence on the brick and mortar mode of networking towards gaining traction, they’re leveraging on technology to grow this asset class.
Communities are the new levers of social capital. If you look around, most businesses are pushing the community angle and using it as a form to create connections. From the group of foodies to the lover of jazz to dating groups among targeted at different market – young singles, divorcees or widowers. So they find a factor that the group has in common and they use it as an avenue to share ideas, thoughts and build relationships. It creates a sense of belonging and attachment. Once a business or individual brand building a social capital is recognised as a key voice in that community, it can then leverage on this asset class to the advantage of its business growth.
Also, as a community, what value are you offering to your members? For a social capital to be solidified both parties must win. Information is shared, development growth is on offer and the members of the community do not feel like a commodity even though an effective growth of a community can eventually translate to consumption that can be monetized.
How is your company building social capital? Are you blinking in the dark? Are you ignoring community that relates to your products are you delivering value to that community are you looking for how to cross-sell?
There is a fintech company in Nigeria that was formed from offering service to a community of job searchers, once the job searcher got a job, he/she starts earning an income, the fintech company then positioned itself by creating a product to help the previous job seekers now employees to save. Now, that’s leveraging on social capital built. You need to start thinking how long those lines. How can I build it? How can I monetise?
There’s research that has pointed out that social capital can also be associated with some negative characteristics. Although tightly knit networks make possible the achievement of certain ends for their members like we mentioned, this bonding can also hinder entry and deny benefits to non-members or abuse personal freedom of some members. A responsible forward-thinking company should only push for the positive element.
Editor’s Note: This article was originally published in The Spark Magazine. Find the magazine here to read other articles.